Binance co-founder and former CEO, Changpeng ‘CZ’ Zhao, has dismissed claims that his exchange played a significant role in the crypto market crash in October 2025, which resulted in over $19 billion in leveraged positions being forcibly liquidated within a 24-hour window.
Bitcoin (BTC) lost approximately $10,000 in value within minutes, falling from over $120,000 to below $105,000 during a flash crash. The apex crypto fell over 14% from its peak, while the total crypto market capitalization contracted by an estimated $350 billion.
During a live ask-me-anything session on Binance Square, CZ called the accusation that the world’s largest digital asset trading platform caused the market downturn “far-fetched”.
CZ Rejects Claims Binance Caused October Flash Crash
Zhao also addressed allegations that Binance triggered liquidations after users experienced technical problems and price discrepancies. Following the crash, the exchange offered approximately $600 million in compensation to affected customers and businesses.
“There is a larger group that claims the October 10th crash was caused by Binance and wants Binance to compensate them for everything. If you are living in that world in your head, you are unlikely to be successful in the future,” he said.
The billionaire emphasized that the exchange operates as a regulated company in the United Arab Emirates, with regulatory agencies having oversight on its various activities. He also noted that the U.S. government monitors the platform. Zhao clarified that he was speaking as a company shareholder and its user, and not its chief.
He stepped down as CEO in November 2023 as part of a $4.3 billion settlement with the U.S. government after pleading guilty to violating federal anti-money laundering laws, specifically for failing to implement adequate AML controls on Binance. Authorities said this allowed the platform to facilitate illicit activities, such as processing transactions for terrorist organizations, sexual abuse material, and ransomware proceeds.
Zhao paid a $50 million personal fine, while Binance agreed to pay $4.3 billion in penalties. The UAE-resident also accepted a four-month prison sentence, which he served in a U.S. federal prison before being released in September 2024. He was also permanently banned from managing the company and cannot hold a corporate position for at least three years.
Trump Pardons CZ, Reversing Prior Administration’s ‘War on Crypto’
In October, President Donald Trump pardoned CZ, clearing his criminal record and lifting restrictions that prevented him from running financial ventures. The White House framed the pardon as course-correcting what it called the “Biden administration’s war on cryptocurrency,” arguing that Zhao was unfairly prosecuted despite no allegations of fraud or identifiable victims.
The pardon may pave the way for Binance’s return to the U.S. market, with CZ expressing his gratitude for Trump’s actions and vowing to help make America the “Crypto Capital of the World,” aligning with the President’s pro-crypto policy direction.
However, controversy and criticism followed the pardon, with lawmakers like Senator Elizabeth Warren (D-Mass) calling it an example of “corruption,” as she cited close ties between CZ and the Trump family’s crypto venture, World Liberty Financial. Binance had previously accepted a $2 billion investment paid for in USD1, a U.S. dollar-denominated stablecoin issued by the DeFi firm.
During a CNBC interview last Thursday at the World Economic Forum in Davos, Zhao clarified that he has no business relationship “whatsoever” with the President’s family. The controversy centers around the $2 billion investment made into the company by the Abu Dhabi state-owned firm MGX, which was carried out using USD1.
He noted that MGX is an investor in the company, and his request to them was to “pay in crypto,” as Binance did not want to deal with banks. He added that the firm has since converted portions of that funding out of the stablecoin. Zhao added that accepting a payment in a particular coin does not constitute an investment in its issuer, stating that many people were misconstructing it.
When asked whether he had spoken directly with Trump, Zhao noted that the closest he came to the President was about “30 to 40 feet away” in the audience during the Board of Peace signing ceremony at Davos.
